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In its initial studies of the compensation-disclosure rules implemented by the Securities and Exchange Commission last year, the CFA Institute’s Centre for Financial Market Integrity was one of many parties that had some tough questions. After analyzing how companies applied the new rules during the year, however, those questions have evolved into a call for SEC action.

In a year-end letter to John W. White, director of the SEC’s Division of Corporation Finance, two top officials of the association of more than 92,500 financial analysts and other professionals made 10 recommendations, reflecting the fact that they were “highly disappointed in the inconsistent and overly complex implementation of the rules exhibited by many companies.”

First among the proposals: press the SEC’s “efforts to direct companies to meet the intent of full, open, and honest communication of compensation practices.” The CFA unit said that companies were using “endless and complex legal boiler-plate,” and avoiding full disclosure “by inappropriate claims that compensation metrics are proprietary.”

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The new rules, said the letter, require companies to use plain language to show investors “the full picture of an issuer’s executive compensation process.” This mandate is being ignored by many companies, added Kurt Schacht, managing director of the Centre, and James C. Allen, director of its Capital Markets Policy Group.

Nearly one year after issuing the disclosure rules, the SEC acknowledged the lack of clarity in how companies have been describing the way in which they pay their executives. The commission has sent comment letters to at least 350 companies asking them to provide more-understandable disclosures.

Apparently the SEC’s actions thus far are not enough for the CFA: the institute has asked the SEC “to further inform issuers about the responsibilities of their compensation committees to actively participate” in the review and preparation of the Compensation Discussion and Analysis (CD&A). They urged the commission to call corporate committees to follow up with them.

A third proposal is to tighten the use of the Summary Compensation Table (SCT) for reporting the fair value of share-based awards, rather than using the GAAP compensation-expense method. “The CFA Institute Centre recognizes the reasons behind the commission’s late changes to the SCT to have issuers report only the portion of share-based compensation that is recorded as an expense in the income statement,” Schacht and Allen wrote. However, “the SCT continues to require inconsistent reporting in other areas of executive compensation.” Requiring better reporting is the desire of investors who want to know the current value of what boards have promised to pay executives in future years, they wrote.

Other CFA Centre recommendations call for the SEC to press companies to describe any use of company assets worth more than $10,000 in compensation, regardless of whether the company or the individual executive pays for it through a perquisite purchase program, and a strict limit on allowing companies to use “competitive considerations” as a reason to not disclose their compensation strategy. The “formulas and metrics used to determine performance-based compensation should be disclosed,” the letter said.

Other areas that need to be improved, according to Schacht and Allen, are the disclosure of how much compensation consultants earn and their level of independence, and the role played by a company’s CEO in determining his or her own compensation. The CFA Centre sought three years of comparable information in the SCT for each named executive in the filings, along with “graphic comparisons of issuers’ performance against their peers” and the disclosure of names of “specific competitors used by the company” to create benchmarks for determining executive compensation.

A spokeswoman for the Centre said the SEC hadn’t yet responded to the letter.